Post on 05-Jan-2016
transcript
Business, Society and the Environment
Session 3
Management: Environmental Issues
By Paul Gauci
Environmental Influences on the Firm
Legal Factors E.g. Employment Acts; Financial Services Act
Ethical Factors E.g. Relationships with customers; Shareholders;
Employees and Suppliers
Political Factors E.g.Government Policies, Privatization, Single European
Market, Globalization.
Economic Factors
External: E.g. state of bank’s markets, competition, trade, purchasing power, transition from manufacturing to services industries
Internal: E.g. trend of specialization and centralized processing, decentralization of services, cost cutting measures and redundancies, widespread role of IT, flexible working
Social Factors E.g.
Role of banks in country.
Changing patterns in population distribution (aging)
Role of woman employees
Values and attitudes
Social responsibility and pricing strategies.
Profit maximisation (shareholder interest) vs maximum social contribution (society interest)
Focus on ‘accountability’ view
Ethical issues, code of practice, customer charters, dilemma: procedures vs ‘quality’ service
Four Interrelated approaches to Organisational Effectiveness:
Technology Factors E.g.
Impact of IT during last two decadesIT and job design; work processes; and business
process re-engineeringDemand for specialist staff (knowledge workers)Creation of IT based products and servicesImprovement of internal communication
Competition
Existing players who provide similar services and can launch, in response to a new product, an imitation just days later.Niche players who provide a restricted range of
services and can act as strong competitors in those specialist areas.Non-financial companies who have diversified and
offer restricted financial services, e.g. unit trusts, personal loans, credit cards, etc.Foreign banks; emerging role of building societies and
new players like retail organizations
Example: UK Banks have responded by:
Extending into the overseas market, particularly Europe;
Offering a wider range of investment services;Offering share dealing services;Developing mortgage lending business;Developing accountancy services;Developing insurance services;
Marketing and providing services geared to different customer needs: pensioners, women, students etc.
Using more sophisticated customer information services;
Making premises more user friendly.
The amount of competition has also led to stringent efforts to control costs, thereby trying to maximize profitability and competitive pricing.
It has also led to changes in structure, for example the retail/corporate split, the geographic or relationship/transaction split.
TheOrganisation
The Micro-environmentSuppliers
Competition
Labour & Industrial Relations
Customers
Finance
Local Community
The Macro-environment Political
EconomicalTechnological
Social
The Organisation – Its Environment
The Environment of Business
The distinction between macro-environment and the
micro-environment the two is significant – firms have
little or no control over their macro-environment yet
by their actions may affect, or be affected by their
micro-environment.
THE SOCIALLY RESPONSIBLE FIRM
EMPLOYEE RELATIONS
Employee education and training.The working environmentAttitudes to disadvantaged groups
CONSUMER PROTECTION
Product SafetyMisleading AdvertisingConsumer complaintsAfter-sales service
THE ENVIRONMENTCommunity InvolvementPollutionPolitical contributionsRelationships with other firmsAvoid dealing with certain productsAvoid dealing with certain countries
FINANCIAL OPENNESS
Bribery and corruptionExecutive pay and compensationCompany ownership and controlaccounting policiesPresentation of information
Approaches to Ethics ManagementCharacteristics of Compliance Strategy
Vision Conformity to imposed standards
Objective Prevention of Criminal Misconduct
Leadership Lawyer Driven
Methods Education, reduced discretion, auditing and controls and penalties
Characteristics of Integrity Strategy
Vision Self -governance according to chosen standards
Objective Enable responsible conduct
Leadership Management driven
Methods Education, leadership, accountability, organisational systems and decision processes auditing and controls, and penalties.
Source: Adapted from Paine, L.W. Managing for organisation integrity. Harvard Business Review, March-April, 1994, 113.
Tomorrow’s Company in Action
Customers
Suppliers
Employees
Investors
Community
C
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P
A
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WIN -WIN
RELATIONSHIPS
Managers’ Agenda
1 Purpose Purpose Do we articulate the company’s
purpose consistently? Does the company’s purpose serve to inspire commitment.
2 Values Are we clear and consistent about values? Are
those values explicit? Do we practise what we preach on openness, fairness and diversity?
Managers’ Agenda
3 Success model Can we articulate the company’s success model to
key groups? Can they describe the model to us? Do they understand their part in adding value to business?
4 Leadership How successful are we in gaining the commitment
of those whose contribution is crucial to the sustainable success of the business? How do we know about their level of commitment?
Managers’ agenda
5 Communication and Involvement
Is our communication process aimed at raising levels of understanding on all sides and aligning the interests of those important to the success of the company?
Do we adapt the company as a result of communication? What programmes have we put in place aimed at enhancing the company’s key relationships.
Managers’ agenda
6 Reward system
How do we ensure the company behaves successfully?
Do we use a success language and operate a reward system which encourages behaviours that drive performance?
Managers’ agenda
7 Measurement
Do we have a useful overall measurement of management effectiveness?
Do our measures match our success model?
Do we measure progress in each relationship?
Are we fully reflecting the level of public interest in our business in terms of measuring our licence to operate?
Managers’ agenda
8 Organisation
Does our structure match our sources of success?
Is it flexible enough to adapt to change?
How do we identify organisational barriers to flexibility and to the achievement of our company purpose?
Managers’ agenda
9 Learning Organisation
Do we inspire our people to learn? Is our appraisal system effective in linking personal development and learning with business goals? Do we have a systematic approach to becoming a learning organisation?Do our people have personal development plans? Do we equip our people with transferable skills?
“The best business management is about creating
tomorrow out of today”
Sir John Harvey-Jones